1. Vide a Memorandum of Claim dated 24th January 2025, as amended by the Amended Memorandum of Claim dated 27th January 2026, the Claimant alleges that the Respondent unfairly and unlawfully terminated his employment. He seeks the following reliefs against the Respondent:
i. The Claimant be compensated at a sum of Kshs 4,800,000 being his gross salary for a period of ten years
ii. The Claimant be compensated for his erroneous dismissal and lose of livelihood
iii. Any other costs the court may deem just to grant
2. The Claimant averred that he was employed by the Respondent as a Station Manager on 22nd November 2017 at a monthly salary of Kshs. 40,000.
3. He further averred that he served the Respondent diligently until 14th November 2024, when the Respondent, through Kelvin Gathara, its Human Resource Manager, issued a notice to show cause to him on allegations of forgery and misuse of the company letterhead.
4. The Claimant stated that, from the said show cause letter, he was accused of permitting the Station Supervisor to use the company letterhead to draft a fraudulent letter to the Kenya Revenue Authority (KRA) without reporting the incident to the Respondent. He was also accused of allowing the issuance of an ETR receipt in the name of Zimland Company Limited, despite knowledge that the said company had no trading relationship with the Respondent.
5. The Claimant contended that the said communication and use of the company letterhead were admitted by the Station Supervisor.
6. He further averred that there were no written guidelines or communication from the Respondent specifying who was authorized to use the company letterhead, or the circumstances under which it was to be used in official correspondence.
7. It was the Claimant’s position that the letter in question, although containing errors, did not amount to a forgery.
8. The Claimant further stated that Zimland Company Limited had always been a legitimate cash-paying customer at the station, and that all ETR receipts issued in its favour reflected actual transactions conducted at the station.
9. He maintained that Zimland Company Limited did not have a credit arrangement with the Respondent, thereby negating any element of fraud.
10. The Claimant averred that, as Station Manager overseeing operations, he could not reasonably be expected to review every document, communication, or transaction on a daily basis and that he only became aware of the incident after it had already occurred.
11. In response to the Claim, the Respondent filed a Memorandum of Reply dated 1st October 2025, in which it averred that the Claimant, in his capacity as Station Manager at its Langas petrol station along the Eldoret–Kapsabet Road, allowed the Station Supervisor, one Merlyne Ejakait, on 4th November 2024, to use the company letterhead without authority from the Territory Manager to draft a letter to KRA in support of an alleged customer, with the intent of facilitating tax evasion. The Respondent further alleged that the Claimant allowed the letter to be signed and stamped and failed to escalate the matter to management or his immediate supervisor, contrary to his job description.
12. The Respondent further averred that, in a handwritten letter dated 6th November 2024 addressed to Mr. Francis Ogada, its Retail Manager, the Claimant acknowledged having been informed of the incident by the Station Supervisor on 4th November 2024, but had not reported the matter to management or his superior by that date.
13. The Respondent averred that its investigation team subsequently took over the matter, prepared a final incident report, and reported the matter at Langas Police Station under OB No. 29/07/2024.
14. According to the Respondent, the incident report established that the root cause of the incident was the Claimant’s failure to intervene and question the Station Supervisor regarding the letter to KRA, thereby exposing the Respondent to potential penalties from KRA.
15. The Respondent further stated that the incident report recommended that disciplinary action be taken against both the Claimant and the Station Supervisor, Merlyne Ejakait.
16. It was therefore the Respondent’s case that it issued a notice to show cause dated 14th November 2024, conducted a disciplinary hearing and subsequently terminated the Claimant’s employment in compliance with due process.
17. The Respondent consequently urged the Court to dismiss the Claimant’s suit with costs.
18. The matter was thereafter set down for full trial.
The Evidence
19. The Claimant testified on 28th January 2026 as CW1. He adopted his witness statement recorded on 6th January 2024 as his evidence in chief and relied on the bundle of documents filed in support of his case.
20. The Claimant testified that no committee was constituted to investigate the incident. According to him, the Respondent prepared and produced false minutes which omitted his actual representations and purported to record responses that he had made during the disciplinary hearing. He further stated that he was denied an opportunity to appeal against the decision.
21. The Claimant maintained that he had been wrongfully accused of writing a letter to TSO and KRA. He explained that TSO was an office of KRA. He denied authoring the letter in question. He stated that the letter had been written and signed by the Respondent’s employee, one Merlyne Ejakait.
22. On cross-examination, the Claimant testified that a virtual disciplinary hearing was held on 15th November 2024 and that he attended the hearing. Regarding the allegations contained in the notice to show cause, the Claimant testified that an ETR receipt had been issued to the customer in question. He maintained that the Respondent had previously transacted with Zimland Company Limited on a cash basis.
23. The Claimant stated that the ETR receipt constituted proof of the fuel supplied to the customer and that only one ETR receipt had been issued on the material day. He explained that the normal procedure was for a customer to be supplied with fuel before an ETR receipt was issued. According to him, Merlyne informed him that the receipt related to fuel supplied on that particular day.
24. He confirmed that he was the Station Manager and that Merlyne, the Station Supervisor, reported to him. He stated that although they had separate job descriptions, their responsibilities were substantially similar.
25. The Claimant testified that he first saw the letter addressed to KRA on 6th November 2024, when the Territory Manager visited the station to investigate the incident which had occurred on 4th November 2024. He also testified that he was subsequently served with a notice to show cause.
26. The Claimant stated that Merlyne had acted properly and procedurally in issuing the ETR receipt because a customer who had been supplied with fuel was entitled to receive one. He clarified that Merlyne’s conduct was improper to the extent that she ought to have informed him before issuing the letter. He maintained that had she done so, he would have contacted his superior to inquire whether the transaction was proper. He stated that Merlyne neither called him before issuing the receipt nor sought his consent.
27. The Claimant confirmed that he was accorded an opportunity to present his case during the disciplinary hearing.
28. The Claimant explained that, in the ordinary course of business, confirmation of a receipt was done by rubber-stamping on the ETR receipt. He stated that he was unaware that a separate handwritten letter had been prepared, as this was not the normal practice. He reiterated that Merlyne did not inform him that she had written a letter to KRA.
29. When referred to his termination letter dated 10th December 2024, the Claimant confirmed that he was offered his terminal dues and payment for accrued leave days. He was also issued with a certificate of service.
30. The Claimant further testified that he had signed a job description. He acknowledged that clause 6 thereof required him to report, document and follow up on the closure of all incidents occurring at the service station.
31. The Respondent called Kelvin Gathara, its Legal and Human Resource Manager, who testified as RW1. He adopted his witness statement as his evidence in chief and relied on the Respondent’s bundle of documents filed before the Court.
32. RW1 testified that the Claimant had assisted Zimland Company Limited to evade tax through the issuance of an ETR receipt belonging to the Respondent. He stated that the Claimant was the Station Manager and was responsible for the operations of the station. According to RW1, the Claimant failed to report the fictitious letter after the incident occurred. He further testified that the Respondent had been exposed to potential tax liabilities arising from the issuance of ETR receipts to Zimland Company Limited, which he stated was not a customer of the Respondent. He maintained that the receipts issued to the company were fictitious.
33. On cross-examination, RW1 stated that Zimland Company Limited was neither a cash nor a credit customer of the Respondent. He further stated that Merlyne had not identified Zimland Company Limited as a customer.
34. RW1 maintained that the Claimant had assisted Zimland Company Limited to evade tax by facilitating the issuance of an ETR receipt. He acknowledged that the ETR receipt had been raised by Merlyne but stated that the Claimant was implicated because he failed to report the incident after becoming aware of it.
35. RW1 further alleged that Merlyne had acted under the Claimant’s instructions. He stated that Merlyne had recorded a statement indicating that she informed the Claimant of the incident and that, according to the disciplinary minutes, she had stated that she had been instructed to undertake the transaction.
36. RW1 testified that issuing a letter to KRA did not form part of the Respondent’s normal operations and that the Station Manager was obligated to report such an occurrence. He further stated that employees were prohibited from sharing the Respondent’s information without authority and that this prohibition was contained in the Respondent’s guidelines and the employees’ contracts.
37. RW1 stated that he was unaware whether the Claimant had lodged an appeal. It was his testimony that the Claimant’s negligence warranted dismissal.
38. On re-examination, RW1 stated that Zimland Company Limited was a credit customer of the Respondent and that the ETR receipt related to a transaction undertaken during an earlier period. He further stated that ETR receipts ought to be issued at the time when the underlying transaction occurred.
39. RW1 reiterated that the Claimant’s employment was terminated because he was aware of the incident but failed to report it to management.
40. At the close of the hearing, the Court directed the parties to file written submissions. The Claimant’s submissions are dated 12th March 2026, whereas the Respondent’s submissions are dated 27th March 2026.
Determination
41. I have considered the pleadings; the evidence and submissions of the parties and I find that the issues that arise for my determination are: -
a. Whether the Respondent had a valid and fair reason for terminating the Claimant’s employment;
b. Whether due process was followed in terminating the Claimant’s employment;
c. Whether the Claimant is entitled to the remedies sought.
Whether the Respondent had a valid and fair reason for terminating the Claimant’s employment
42. Under sections 43 and 45 of the Employment Act, the Respondent bears the burden of proving the reason for termination and demonstrating that the reason was valid and fair. The Court must therefore determine whether the reason that existed at the time of termination related to the Claimant's conduct and whether it justified the termination.
43. The Claimant was issued with a termination letter dated 10th December 2024 setting out the grounds for termination as reproduced hereunder: -
Dear Constantine,
RE: TERMINATION OF EMPLOYMENT
We refer to the above matter and the disciplinary hearing held at the Lexo Energy Kenya Limited Company, head office on 14th November 2024
We note that it was proved through the hearing that your several acts of negligence that could contribute to company’s prosecution by Kenya Revenue Authority in relation to fictitious tax transactions at Lexo Eldoret Service Station.
Accordingly, those negligent acts violates the provisions of section 44(4c) of the Employment Act, the Company Policy and the Company Procedural and Operational Manual which you are aware of.
The purpose of this letter is to confirm termination of your employment from your position as Station Manager at Lexo Energy Eldoret Station (the Service Station) effective 10th December ,2024.
In line with our Exit & Funds recovery policy, you will receive prorated pay for-
Salary upto 10th December 2024
Accrued but outstanding leave days calculated pro-rata upto the end of your employment
Any cash shortages amount owed to Lexo Energy will be deducted from your final dues.
Yours faithfully,
FOR: LEXO ENERGY KENYA LIMITED
Signed
Kevin Gathara
Legal & Human Resources Manager
[Emphasis added]
44. From the above letter, the reason for the termination of the Claimant's employment was that, in his capacity as the Station Manager, he had committed several acts of negligence which exposed the Respondent to possible prosecution by the Kenya Revenue Authority in relation to fictitious tax transactions at the Lexo Eldoret Service Station. The Respondent further alleged that such negligence amounted to gross misconduct within the meaning of section 44(4)(c) of the Employment Act and was contrary to the Respondent's policies and operational procedures.
45. The question before the court is whether the Respondent proved, on a balance of probabilities, that the Claimant was indeed negligent in the performance of his duties and whether such negligence constituted a valid and fair reason for the termination of his employment within the meaning of sections 43 and 45 of the Employment Act.
46. The evidence on record is that at the material time the Claimant served as the Station Manager of the Respondent's Eldoret Service Station. In his statement of the incident during investigations the Claimant explained as follows:
Constantine Miheso
Station Manager
Lexo Eldoret Service Station
6th November, 2024
Francis Orasa
Retail manager
Lexo energy (K) ltd
Dear sir.
RE: EXPLANATION ON ACKNOWLEDGMENT OF ZIMLAND CO. LTD
On 4th Nov 2024 late in the evening the Supervisor Merlyne Ejekait informed that she received a letter from Kurgat (client) that he needed acknowledged of the transactions that he had made in the month of August & September, 2024. I was not privy of the content now that she had not shared or left a copy to refer to.
On 6th Nov 2024 I was called by Korir from head office to give light on the same and that’s when he explained to me the details of the acknowledgment. If there will be need for clarification I would be happy to help.
Yours sincerely
signed
47. Merlyne also explained as follows:
LEXO ENERGY LTD
ELDORET SERVICE STATION
6TH NOV 2024
THE RETAIL MANAGER
LEXO ENERGY CO LTD
P.O BOX 22497-0050
NAIROBI
Dear sir
REF EXPLANATION ON THE ACKNOWLEDGMENT LETTER ISSUED TO HILNO (KURGAT)
I write the letter to you to explain how this incident transpired.
The customer Hilno who fuels with us had requested to be issued an ETR receipt to Zimland company and not Hilno.
He came to the station with a document and requested be signed and stamped. I asked him if he has talked to Miheso then he told me he had rang him but didn’t pick his call, he explained to me that the document was urgent since he wanted to present it somewhere just to show he is trading with us.
He has never and I have never done this before since we started business with him.
I innocently signed the letter without knowing the implication. I informed Miheso on the same.
I am truly remorseful for this and promise that I will never repeat.
I beg your pardon sir.
Yours sincerely,
Meryne Ejakait.
signed
48. The notice to show cause letter accused the Claimant that by virtue of his position as Station Manager, he bore overall responsibility for the management and supervision of the station's operations and the employees working under him. The charges as per show cause letter and minutes of the disciplinary hearing are reproduced below:
1. You allowed your station supervisor (Merlyne Ejakait) to use the company letter head to write a fake letter to KRA, sign and stamp with the station stamp and you did not report to the company even after becoming aware of the incident.
2. You allowed issuance of ETR receipt in the name of Zimland Company Limited knowing that we do not trade with them.
This is against the company policy and the work instruction manual which you are well aware of. Please note that an incident report for the misconduct has been presented to the HR office detailing the above as attached for your ease of reference.
49. In his reply to the show cause letter he stated as follows:
Constantine Miheso
Station Manager
Lexo Eldoret Service Station
November 14, 2024
To
Legal and Human Resources Manger
Lexo Energy
RE: SHOWCAUSENOTICE FOR LETTER OF FORGERY AND MISUSE OF COMPANY LETTERHEAD AT LEXO ELDORET SERVICE STATION
Dear Mr. Gathara,
I am writing in response to the show-cause notice issued to me regarding the allegations of forgery and misuse of the company letterhead at the Lexo Eldoret Service Station. I appreciate the opportunity to provide clarity on this matter and to explain my position in detail. Since I joined Lexo Energy in December 2017, I have worked diligently and with utmost integrity, demonstrating a proven track record at both Lexo Kitale and Lexo Eldoret Stations. Over the past seven years, I have not had any issues raised regarding my conduct or integrity, and I have always strived to uphold the highest professional standards. Up until this incident, no concerns related to my integrity have ever been levelled against me.
In light of this, I would like to address the key points raised in the incident report and the investigation findings, and respectfully submit that I am not culpable in this matter. Below are the key points for your consideration:
1. No Conclusive Investigation or Findings Presented
As of today, I have not been presented with the full details of the investigation, nor have I been made aware of any conclusive findings. The investigation remains inconclusive, and I respectfully request that it be thoroughly reviewed before any disciplinary action is taken. Without conclusive evidence, it is premature to proceed with the show-cause notice.
2. Clarification on the Use of Letterhead
There is no explicit policy or procedure at Lexo Energy that prohibits the use of company letterhead at the station. To the best of my knowledge, there has been no formal communication regarding such a restriction. As Station Manager, I was not made aware of any issue with using the letterhead for the letter in question.
3. The Letter Contained Errors, Not Forgery
The letter in question, although it contained inaccuracies, was not a forgery. It erroneously referred to Zimland Company Limited as a credit customer, when in fact, they are a cash-paying customer at the station. This mistake appears to have been made by Merlyne, who was acting on a pre-drafted letter provided by Zephaniah Kurgat and adapted it. There was no intention to deceive or mislead in the drafting of the letter.
4. ETR Receipts Are Authentic
Zimland Company Limited has always been a legitimate cash-paying customer at the station, and all ETR receipts issued in their favor reflect actual transactions made as has been no evidence presented to suggest that the ETR receipts are fraudulent or incorrect in any way.
5. Merlyne Acted Independently
Merlyne, as the Station Supervisor, acted independently in preparing and signing the letter to KRA. She was given a soft copy of the letter by Zephaniah Kurgat and made an error by adapting it to the company's letterhead. She has admitted her mistake, and it was not an intentional act of misconduct. Merlyne expressed remorse for her actions, and this was done without my knowledge or involvement.
6. My Role as Station Manager
As Station Manager, I oversee operations at the station, but I cannot be expected to review every document or transaction that takes place on a daily basis. I was not made aware of this issue until after it had occurred, when Mr. Korir from HQ contacted me regarding the letter. It is unreasonable to hold me responsible for actions I was unaware of, especially when they were carried out by a staff member under my supervision without my involvement.
7. Zimland Company Limited's Relationship with Lexo Energy
Zimland Company Limited is a legitimate cash-paying customer of the station. Zephaniah Kurgat, who owns Zimland Company Limited, has multiple companies, and Zimland Company Limited is one of them. The confusion surrounding the letter stemmed from the fact that Kurgat provided Merlyne with a pre-drafted letter. There was no intention to deceive, and the error in the letter was simply an oversight.
8. Conclusion
In light of the above points, I respectfully request that the show-cause notice be reviewed and that the disciplinary action against me be reconsidered. The letter to KRA was not forged but contained an honest error made by Merlyne. The ETR receipts issued to Zimland Company Limited are legitimate, and I had no involvement in the preparation or signing of the letter in question
I am available to discuss this matter further or provide additional clarification as needed. Thank you for your attention to this issue, and I look forward to resolving this matter fairly.
Yours faithfully.
Signed
Constantine Miheso
Station Manager
Lexo Eldoret Service Station
50. The response to show cause letter by Merlyne was never produced by the Respondents and the court cannot ascertain whether the confirmed what she stated in the statement of 6th November, 2024 which absolved the Claimant from blame or what she stated at the hearing as per the minutes, which blamed the Claimant.
51. During cross examination, the Claimant acknowledged that he had signed his job description and that clause 6 required him to report, document and follow up on the closure of all incidents at the service station. The relevant paragraphs of the Claimant’s job description as Station Manager provides:
A Station Manager is primarily the accounting officer at the service Station. S/he is a LEADER who ensures that there is team work to safely achieve the site business objectives through optimization of the organization's resources namely: people, costs, inventory, time, assets, quality, customers and environment.
Report, document and follow up for closure of all incidents at the service station.
52. The Claimant testified that his colleague Merlyne informed him on the evening of 4th November 2024 that she had issued an ETR receipt to Zimland Company Limited. From the evidence on record, Zimland Company Limited was a cash paying customer at the Station, but did not have a credit account. In the preliminary investigation report it is stated that the owner of Zimland Mr. Kurgat talked to the investigation team and informed the team that he owned more than 10 companies and Zimland was one of them.
53. The Claimant further explained that he had not seen the letter to KRA as Merlyne had not given him a copy. He stated that he first saw the letter on 6th November, 2024 when it was brought to his attention by Mr. Korir from head office.
54. From the foregoing it is evident that as at the time the Claimant was asked to prepare the initial statement on the incident, there was nothing to warn him that what Merlyne did was wrong or constituted an incident requiring him to report to head office in his capacity as Station Manager. Any person in his position would not be expected to suspect that a confirmation by a colleague of transactions to a client would constitute an incident requiring reporting.
55. It is clear from the initial statements of both the Claimant and Merlyne that Merlyne served the customer in the absence of the Claimant. Merlyne stated in her statement of 6th November, 2024 that when Mr. Kurgat went to the station and requested her to print and sign the draft he had prepared on the Respondent’s letter head “I asked him if he has talked to Miheso then he told me he had rang him but didn’t pick his call, he explained to me that the document was urgent since he wanted to present it somewhere just to show he is trading with us. … I innocently signed the letter without knowing the implication. I informed Miheso on the same.”
56. The Claimant on his part stated “On 4th Nov 2024 late in the evening the Supervisor Merlyne Ejekait informed that she received a letter from Kurgat (client) that he needed acknowledged of the transactions that he had made in the month of August & September, 2024. I was not privy of the content now that she had not shared or left a copy to refer to.”
57. The Claimant maintained the same position throughout the disciplinary process.
58. From the minutes of the disciplinary hearing, it would appear that Merlyne changed her story. According to the minutes, she stated that the Station Manager (the Claimant) instructed her to print, stamp and sign the fake letter that was on Lexo letter head. That she reported back to the Claimant the following day and told him that the customer took the letter.
59. It is material that this information was given at the hearing of Merlyne’s disciplinary case in the absence of the Claimant who had no opportunity to comment on Merlyne’s revised evidence.
60. It is evident from the letter of termination that it is the evidence by Merlyne at the disciplinary hearing which was not shared with the Claimant that the Respondent relied upon to terminate the employment of the Claimant.
61. Further, it is noteworthy that the Claimant severally averred that there was no policy on the use of letterheads specifically prohibiting the use or requiring permission to use company letter head as alleged by the Respondent. This averment was not denied by the Respondent and neither did the Respondent produce the said Company Policy or Work Instruction Manual.
62. It is further noted that it is on 8th November, 2024, after the incident of 4th November, 2024, that Kelvin Gathara, RW1, sent an email to “Lexo Stations”, titled “Unauthorised Use of Company Letter Head”. See Document 4 of Claimant’s List of Documents. This supports that Claimant’s position that there was no such policy on the use of company letter head as at the time Merlyne issued the letter to the customer on the company letter head. The email reads:
Sent: From Outlook For Android
From : Kelvin Gathara
Sent: Friday, November 8, 2024 7:33:21 am
To: Lexo Stations lexostations@lexoenergy.com; Lexo staff
SUBJECT: UNAUTHORIZED USE OF COMPANY LETTER HEAD
Dear all,
I hope you are doing well.
This is to notify you that none of the employees should sign a letter on the Company’s letterhead unless they are duly authorized by the Board of Directors of the Company. I wish to retaliate that signing of letters on the Company’s letterhead binds the Company and therefore only authorized signatories of the Company duly authorized by the Board have the authority to sign letters on Company letterhead.
Accordingly, any authorized use or singing of letters on Company’s letterhead is a breach of Company policy and may lead to termination of your employment and prosecution in a court of law for forgery.
I wish to request that all head of departments of the Company to remind all the employees including our CSAs at the stations of this notice in their departmental meetings to ensure compliance.
Thank you very much.
Kind regards
Kelvin Gathara
Legal & Human Resources Manager
Lexo Energy Kenya Limited,
Tel:+2540208000496
M:+254727098181
Laiboni Centre, 5th Floor, Lenana Road,
P.O Box 22428, Nairobi Kenya,
www.lexoenergy.com
63. In the circumstances, I find that the Respondent did not prove the charges against the Claimant. I further find that the facts as set out in the evidence before the court do not disclose culpable negligence or breach of company policy on the part of the Claimant. The Respondent has therefore not discharged its burden under sections 43 of the Employment Act.
Whether due process was followed in terminating the Claimant’s employment
64. The Employment Act requires that termination of an employee’s employment be carried out in accordance with fair procedure. This is couched in mandatory terms. Section 41 of the Employment Act provides as follows: -
“Subject to section 42(1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation.”
65. The Claimant averred that the disciplinary process taken against him was procedurally unfair. He testified that no investigation committee was constituted and that the Respondent relied on fabricated disciplinary minutes which did not accurately capture his responses. Further, he averred that he was denied the right to appeal against the decision to terminate his employment.
66. The Respondent, on the other hand, maintained that it complied with the law. It produced a notice to show cause dated 14th November 2024, the Claimant's response to
[...truncated]
i. The Claimant be compensated at a sum of Kshs 4,800,000 being his gross salary for a period of ten years
ii. The Claimant be compensated for his erroneous dismissal and lose of livelihood
iii. Any other costs the court may deem just to grant
2. The Claimant averred that he was employed by the Respondent as a Station Manager on 22nd November 2017 at a monthly salary of Kshs. 40,000.
3. He further averred that he served the Respondent diligently until 14th November 2024, when the Respondent, through Kelvin Gathara, its Human Resource Manager, issued a notice to show cause to him on allegations of forgery and misuse of the company letterhead.
4. The Claimant stated that, from the said show cause letter, he was accused of permitting the Station Supervisor to use the company letterhead to draft a fraudulent letter to the Kenya Revenue Authority (KRA) without reporting the incident to the Respondent. He was also accused of allowing the issuance of an ETR receipt in the name of Zimland Company Limited, despite knowledge that the said company had no trading relationship with the Respondent.
5. The Claimant contended that the said communication and use of the company letterhead were admitted by the Station Supervisor.
6. He further averred that there were no written guidelines or communication from the Respondent specifying who was authorized to use the company letterhead, or the circumstances under which it was to be used in official correspondence.
7. It was the Claimant’s position that the letter in question, although containing errors, did not amount to a forgery.
8. The Claimant further stated that Zimland Company Limited had always been a legitimate cash-paying customer at the station, and that all ETR receipts issued in its favour reflected actual transactions conducted at the station.
9. He maintained that Zimland Company Limited did not have a credit arrangement with the Respondent, thereby negating any element of fraud.
10. The Claimant averred that, as Station Manager overseeing operations, he could not reasonably be expected to review every document, communication, or transaction on a daily basis and that he only became aware of the incident after it had already occurred.
11. In response to the Claim, the Respondent filed a Memorandum of Reply dated 1st October 2025, in which it averred that the Claimant, in his capacity as Station Manager at its Langas petrol station along the Eldoret–Kapsabet Road, allowed the Station Supervisor, one Merlyne Ejakait, on 4th November 2024, to use the company letterhead without authority from the Territory Manager to draft a letter to KRA in support of an alleged customer, with the intent of facilitating tax evasion. The Respondent further alleged that the Claimant allowed the letter to be signed and stamped and failed to escalate the matter to management or his immediate supervisor, contrary to his job description.
12. The Respondent further averred that, in a handwritten letter dated 6th November 2024 addressed to Mr. Francis Ogada, its Retail Manager, the Claimant acknowledged having been informed of the incident by the Station Supervisor on 4th November 2024, but had not reported the matter to management or his superior by that date.
13. The Respondent averred that its investigation team subsequently took over the matter, prepared a final incident report, and reported the matter at Langas Police Station under OB No. 29/07/2024.
14. According to the Respondent, the incident report established that the root cause of the incident was the Claimant’s failure to intervene and question the Station Supervisor regarding the letter to KRA, thereby exposing the Respondent to potential penalties from KRA.
15. The Respondent further stated that the incident report recommended that disciplinary action be taken against both the Claimant and the Station Supervisor, Merlyne Ejakait.
16. It was therefore the Respondent’s case that it issued a notice to show cause dated 14th November 2024, conducted a disciplinary hearing and subsequently terminated the Claimant’s employment in compliance with due process.
17. The Respondent consequently urged the Court to dismiss the Claimant’s suit with costs.
18. The matter was thereafter set down for full trial.
The Evidence
19. The Claimant testified on 28th January 2026 as CW1. He adopted his witness statement recorded on 6th January 2024 as his evidence in chief and relied on the bundle of documents filed in support of his case.
20. The Claimant testified that no committee was constituted to investigate the incident. According to him, the Respondent prepared and produced false minutes which omitted his actual representations and purported to record responses that he had made during the disciplinary hearing. He further stated that he was denied an opportunity to appeal against the decision.
21. The Claimant maintained that he had been wrongfully accused of writing a letter to TSO and KRA. He explained that TSO was an office of KRA. He denied authoring the letter in question. He stated that the letter had been written and signed by the Respondent’s employee, one Merlyne Ejakait.
22. On cross-examination, the Claimant testified that a virtual disciplinary hearing was held on 15th November 2024 and that he attended the hearing. Regarding the allegations contained in the notice to show cause, the Claimant testified that an ETR receipt had been issued to the customer in question. He maintained that the Respondent had previously transacted with Zimland Company Limited on a cash basis.
23. The Claimant stated that the ETR receipt constituted proof of the fuel supplied to the customer and that only one ETR receipt had been issued on the material day. He explained that the normal procedure was for a customer to be supplied with fuel before an ETR receipt was issued. According to him, Merlyne informed him that the receipt related to fuel supplied on that particular day.
24. He confirmed that he was the Station Manager and that Merlyne, the Station Supervisor, reported to him. He stated that although they had separate job descriptions, their responsibilities were substantially similar.
25. The Claimant testified that he first saw the letter addressed to KRA on 6th November 2024, when the Territory Manager visited the station to investigate the incident which had occurred on 4th November 2024. He also testified that he was subsequently served with a notice to show cause.
26. The Claimant stated that Merlyne had acted properly and procedurally in issuing the ETR receipt because a customer who had been supplied with fuel was entitled to receive one. He clarified that Merlyne’s conduct was improper to the extent that she ought to have informed him before issuing the letter. He maintained that had she done so, he would have contacted his superior to inquire whether the transaction was proper. He stated that Merlyne neither called him before issuing the receipt nor sought his consent.
27. The Claimant confirmed that he was accorded an opportunity to present his case during the disciplinary hearing.
28. The Claimant explained that, in the ordinary course of business, confirmation of a receipt was done by rubber-stamping on the ETR receipt. He stated that he was unaware that a separate handwritten letter had been prepared, as this was not the normal practice. He reiterated that Merlyne did not inform him that she had written a letter to KRA.
29. When referred to his termination letter dated 10th December 2024, the Claimant confirmed that he was offered his terminal dues and payment for accrued leave days. He was also issued with a certificate of service.
30. The Claimant further testified that he had signed a job description. He acknowledged that clause 6 thereof required him to report, document and follow up on the closure of all incidents occurring at the service station.
31. The Respondent called Kelvin Gathara, its Legal and Human Resource Manager, who testified as RW1. He adopted his witness statement as his evidence in chief and relied on the Respondent’s bundle of documents filed before the Court.
32. RW1 testified that the Claimant had assisted Zimland Company Limited to evade tax through the issuance of an ETR receipt belonging to the Respondent. He stated that the Claimant was the Station Manager and was responsible for the operations of the station. According to RW1, the Claimant failed to report the fictitious letter after the incident occurred. He further testified that the Respondent had been exposed to potential tax liabilities arising from the issuance of ETR receipts to Zimland Company Limited, which he stated was not a customer of the Respondent. He maintained that the receipts issued to the company were fictitious.
33. On cross-examination, RW1 stated that Zimland Company Limited was neither a cash nor a credit customer of the Respondent. He further stated that Merlyne had not identified Zimland Company Limited as a customer.
34. RW1 maintained that the Claimant had assisted Zimland Company Limited to evade tax by facilitating the issuance of an ETR receipt. He acknowledged that the ETR receipt had been raised by Merlyne but stated that the Claimant was implicated because he failed to report the incident after becoming aware of it.
35. RW1 further alleged that Merlyne had acted under the Claimant’s instructions. He stated that Merlyne had recorded a statement indicating that she informed the Claimant of the incident and that, according to the disciplinary minutes, she had stated that she had been instructed to undertake the transaction.
36. RW1 testified that issuing a letter to KRA did not form part of the Respondent’s normal operations and that the Station Manager was obligated to report such an occurrence. He further stated that employees were prohibited from sharing the Respondent’s information without authority and that this prohibition was contained in the Respondent’s guidelines and the employees’ contracts.
37. RW1 stated that he was unaware whether the Claimant had lodged an appeal. It was his testimony that the Claimant’s negligence warranted dismissal.
38. On re-examination, RW1 stated that Zimland Company Limited was a credit customer of the Respondent and that the ETR receipt related to a transaction undertaken during an earlier period. He further stated that ETR receipts ought to be issued at the time when the underlying transaction occurred.
39. RW1 reiterated that the Claimant’s employment was terminated because he was aware of the incident but failed to report it to management.
40. At the close of the hearing, the Court directed the parties to file written submissions. The Claimant’s submissions are dated 12th March 2026, whereas the Respondent’s submissions are dated 27th March 2026.
Determination
41. I have considered the pleadings; the evidence and submissions of the parties and I find that the issues that arise for my determination are: -
a. Whether the Respondent had a valid and fair reason for terminating the Claimant’s employment;
b. Whether due process was followed in terminating the Claimant’s employment;
c. Whether the Claimant is entitled to the remedies sought.
Whether the Respondent had a valid and fair reason for terminating the Claimant’s employment
42. Under sections 43 and 45 of the Employment Act, the Respondent bears the burden of proving the reason for termination and demonstrating that the reason was valid and fair. The Court must therefore determine whether the reason that existed at the time of termination related to the Claimant's conduct and whether it justified the termination.
43. The Claimant was issued with a termination letter dated 10th December 2024 setting out the grounds for termination as reproduced hereunder: -
Dear Constantine,
RE: TERMINATION OF EMPLOYMENT
We refer to the above matter and the disciplinary hearing held at the Lexo Energy Kenya Limited Company, head office on 14th November 2024
We note that it was proved through the hearing that your several acts of negligence that could contribute to company’s prosecution by Kenya Revenue Authority in relation to fictitious tax transactions at Lexo Eldoret Service Station.
Accordingly, those negligent acts violates the provisions of section 44(4c) of the Employment Act, the Company Policy and the Company Procedural and Operational Manual which you are aware of.
The purpose of this letter is to confirm termination of your employment from your position as Station Manager at Lexo Energy Eldoret Station (the Service Station) effective 10th December ,2024.
In line with our Exit & Funds recovery policy, you will receive prorated pay for-
Salary upto 10th December 2024
Accrued but outstanding leave days calculated pro-rata upto the end of your employment
Any cash shortages amount owed to Lexo Energy will be deducted from your final dues.
Yours faithfully,
FOR: LEXO ENERGY KENYA LIMITED
Signed
Kevin Gathara
Legal & Human Resources Manager
[Emphasis added]
44. From the above letter, the reason for the termination of the Claimant's employment was that, in his capacity as the Station Manager, he had committed several acts of negligence which exposed the Respondent to possible prosecution by the Kenya Revenue Authority in relation to fictitious tax transactions at the Lexo Eldoret Service Station. The Respondent further alleged that such negligence amounted to gross misconduct within the meaning of section 44(4)(c) of the Employment Act and was contrary to the Respondent's policies and operational procedures.
45. The question before the court is whether the Respondent proved, on a balance of probabilities, that the Claimant was indeed negligent in the performance of his duties and whether such negligence constituted a valid and fair reason for the termination of his employment within the meaning of sections 43 and 45 of the Employment Act.
46. The evidence on record is that at the material time the Claimant served as the Station Manager of the Respondent's Eldoret Service Station. In his statement of the incident during investigations the Claimant explained as follows:
Constantine Miheso
Station Manager
Lexo Eldoret Service Station
6th November, 2024
Francis Orasa
Retail manager
Lexo energy (K) ltd
Dear sir.
RE: EXPLANATION ON ACKNOWLEDGMENT OF ZIMLAND CO. LTD
On 4th Nov 2024 late in the evening the Supervisor Merlyne Ejekait informed that she received a letter from Kurgat (client) that he needed acknowledged of the transactions that he had made in the month of August & September, 2024. I was not privy of the content now that she had not shared or left a copy to refer to.
On 6th Nov 2024 I was called by Korir from head office to give light on the same and that’s when he explained to me the details of the acknowledgment. If there will be need for clarification I would be happy to help.
Yours sincerely
signed
47. Merlyne also explained as follows:
LEXO ENERGY LTD
ELDORET SERVICE STATION
6TH NOV 2024
THE RETAIL MANAGER
LEXO ENERGY CO LTD
P.O BOX 22497-0050
NAIROBI
Dear sir
REF EXPLANATION ON THE ACKNOWLEDGMENT LETTER ISSUED TO HILNO (KURGAT)
I write the letter to you to explain how this incident transpired.
The customer Hilno who fuels with us had requested to be issued an ETR receipt to Zimland company and not Hilno.
He came to the station with a document and requested be signed and stamped. I asked him if he has talked to Miheso then he told me he had rang him but didn’t pick his call, he explained to me that the document was urgent since he wanted to present it somewhere just to show he is trading with us.
He has never and I have never done this before since we started business with him.
I innocently signed the letter without knowing the implication. I informed Miheso on the same.
I am truly remorseful for this and promise that I will never repeat.
I beg your pardon sir.
Yours sincerely,
Meryne Ejakait.
signed
48. The notice to show cause letter accused the Claimant that by virtue of his position as Station Manager, he bore overall responsibility for the management and supervision of the station's operations and the employees working under him. The charges as per show cause letter and minutes of the disciplinary hearing are reproduced below:
1. You allowed your station supervisor (Merlyne Ejakait) to use the company letter head to write a fake letter to KRA, sign and stamp with the station stamp and you did not report to the company even after becoming aware of the incident.
2. You allowed issuance of ETR receipt in the name of Zimland Company Limited knowing that we do not trade with them.
This is against the company policy and the work instruction manual which you are well aware of. Please note that an incident report for the misconduct has been presented to the HR office detailing the above as attached for your ease of reference.
49. In his reply to the show cause letter he stated as follows:
Constantine Miheso
Station Manager
Lexo Eldoret Service Station
November 14, 2024
To
Legal and Human Resources Manger
Lexo Energy
RE: SHOWCAUSENOTICE FOR LETTER OF FORGERY AND MISUSE OF COMPANY LETTERHEAD AT LEXO ELDORET SERVICE STATION
Dear Mr. Gathara,
I am writing in response to the show-cause notice issued to me regarding the allegations of forgery and misuse of the company letterhead at the Lexo Eldoret Service Station. I appreciate the opportunity to provide clarity on this matter and to explain my position in detail. Since I joined Lexo Energy in December 2017, I have worked diligently and with utmost integrity, demonstrating a proven track record at both Lexo Kitale and Lexo Eldoret Stations. Over the past seven years, I have not had any issues raised regarding my conduct or integrity, and I have always strived to uphold the highest professional standards. Up until this incident, no concerns related to my integrity have ever been levelled against me.
In light of this, I would like to address the key points raised in the incident report and the investigation findings, and respectfully submit that I am not culpable in this matter. Below are the key points for your consideration:
1. No Conclusive Investigation or Findings Presented
As of today, I have not been presented with the full details of the investigation, nor have I been made aware of any conclusive findings. The investigation remains inconclusive, and I respectfully request that it be thoroughly reviewed before any disciplinary action is taken. Without conclusive evidence, it is premature to proceed with the show-cause notice.
2. Clarification on the Use of Letterhead
There is no explicit policy or procedure at Lexo Energy that prohibits the use of company letterhead at the station. To the best of my knowledge, there has been no formal communication regarding such a restriction. As Station Manager, I was not made aware of any issue with using the letterhead for the letter in question.
3. The Letter Contained Errors, Not Forgery
The letter in question, although it contained inaccuracies, was not a forgery. It erroneously referred to Zimland Company Limited as a credit customer, when in fact, they are a cash-paying customer at the station. This mistake appears to have been made by Merlyne, who was acting on a pre-drafted letter provided by Zephaniah Kurgat and adapted it. There was no intention to deceive or mislead in the drafting of the letter.
4. ETR Receipts Are Authentic
Zimland Company Limited has always been a legitimate cash-paying customer at the station, and all ETR receipts issued in their favor reflect actual transactions made as has been no evidence presented to suggest that the ETR receipts are fraudulent or incorrect in any way.
5. Merlyne Acted Independently
Merlyne, as the Station Supervisor, acted independently in preparing and signing the letter to KRA. She was given a soft copy of the letter by Zephaniah Kurgat and made an error by adapting it to the company's letterhead. She has admitted her mistake, and it was not an intentional act of misconduct. Merlyne expressed remorse for her actions, and this was done without my knowledge or involvement.
6. My Role as Station Manager
As Station Manager, I oversee operations at the station, but I cannot be expected to review every document or transaction that takes place on a daily basis. I was not made aware of this issue until after it had occurred, when Mr. Korir from HQ contacted me regarding the letter. It is unreasonable to hold me responsible for actions I was unaware of, especially when they were carried out by a staff member under my supervision without my involvement.
7. Zimland Company Limited's Relationship with Lexo Energy
Zimland Company Limited is a legitimate cash-paying customer of the station. Zephaniah Kurgat, who owns Zimland Company Limited, has multiple companies, and Zimland Company Limited is one of them. The confusion surrounding the letter stemmed from the fact that Kurgat provided Merlyne with a pre-drafted letter. There was no intention to deceive, and the error in the letter was simply an oversight.
8. Conclusion
In light of the above points, I respectfully request that the show-cause notice be reviewed and that the disciplinary action against me be reconsidered. The letter to KRA was not forged but contained an honest error made by Merlyne. The ETR receipts issued to Zimland Company Limited are legitimate, and I had no involvement in the preparation or signing of the letter in question
I am available to discuss this matter further or provide additional clarification as needed. Thank you for your attention to this issue, and I look forward to resolving this matter fairly.
Yours faithfully.
Signed
Constantine Miheso
Station Manager
Lexo Eldoret Service Station
50. The response to show cause letter by Merlyne was never produced by the Respondents and the court cannot ascertain whether the confirmed what she stated in the statement of 6th November, 2024 which absolved the Claimant from blame or what she stated at the hearing as per the minutes, which blamed the Claimant.
51. During cross examination, the Claimant acknowledged that he had signed his job description and that clause 6 required him to report, document and follow up on the closure of all incidents at the service station. The relevant paragraphs of the Claimant’s job description as Station Manager provides:
A Station Manager is primarily the accounting officer at the service Station. S/he is a LEADER who ensures that there is team work to safely achieve the site business objectives through optimization of the organization's resources namely: people, costs, inventory, time, assets, quality, customers and environment.
Report, document and follow up for closure of all incidents at the service station.
52. The Claimant testified that his colleague Merlyne informed him on the evening of 4th November 2024 that she had issued an ETR receipt to Zimland Company Limited. From the evidence on record, Zimland Company Limited was a cash paying customer at the Station, but did not have a credit account. In the preliminary investigation report it is stated that the owner of Zimland Mr. Kurgat talked to the investigation team and informed the team that he owned more than 10 companies and Zimland was one of them.
53. The Claimant further explained that he had not seen the letter to KRA as Merlyne had not given him a copy. He stated that he first saw the letter on 6th November, 2024 when it was brought to his attention by Mr. Korir from head office.
54. From the foregoing it is evident that as at the time the Claimant was asked to prepare the initial statement on the incident, there was nothing to warn him that what Merlyne did was wrong or constituted an incident requiring him to report to head office in his capacity as Station Manager. Any person in his position would not be expected to suspect that a confirmation by a colleague of transactions to a client would constitute an incident requiring reporting.
55. It is clear from the initial statements of both the Claimant and Merlyne that Merlyne served the customer in the absence of the Claimant. Merlyne stated in her statement of 6th November, 2024 that when Mr. Kurgat went to the station and requested her to print and sign the draft he had prepared on the Respondent’s letter head “I asked him if he has talked to Miheso then he told me he had rang him but didn’t pick his call, he explained to me that the document was urgent since he wanted to present it somewhere just to show he is trading with us. … I innocently signed the letter without knowing the implication. I informed Miheso on the same.”
56. The Claimant on his part stated “On 4th Nov 2024 late in the evening the Supervisor Merlyne Ejekait informed that she received a letter from Kurgat (client) that he needed acknowledged of the transactions that he had made in the month of August & September, 2024. I was not privy of the content now that she had not shared or left a copy to refer to.”
57. The Claimant maintained the same position throughout the disciplinary process.
58. From the minutes of the disciplinary hearing, it would appear that Merlyne changed her story. According to the minutes, she stated that the Station Manager (the Claimant) instructed her to print, stamp and sign the fake letter that was on Lexo letter head. That she reported back to the Claimant the following day and told him that the customer took the letter.
59. It is material that this information was given at the hearing of Merlyne’s disciplinary case in the absence of the Claimant who had no opportunity to comment on Merlyne’s revised evidence.
60. It is evident from the letter of termination that it is the evidence by Merlyne at the disciplinary hearing which was not shared with the Claimant that the Respondent relied upon to terminate the employment of the Claimant.
61. Further, it is noteworthy that the Claimant severally averred that there was no policy on the use of letterheads specifically prohibiting the use or requiring permission to use company letter head as alleged by the Respondent. This averment was not denied by the Respondent and neither did the Respondent produce the said Company Policy or Work Instruction Manual.
62. It is further noted that it is on 8th November, 2024, after the incident of 4th November, 2024, that Kelvin Gathara, RW1, sent an email to “Lexo Stations”, titled “Unauthorised Use of Company Letter Head”. See Document 4 of Claimant’s List of Documents. This supports that Claimant’s position that there was no such policy on the use of company letter head as at the time Merlyne issued the letter to the customer on the company letter head. The email reads:
Sent: From Outlook For Android
From : Kelvin Gathara
Sent: Friday, November 8, 2024 7:33:21 am
To: Lexo Stations lexostations@lexoenergy.com; Lexo staff
SUBJECT: UNAUTHORIZED USE OF COMPANY LETTER HEAD
Dear all,
I hope you are doing well.
This is to notify you that none of the employees should sign a letter on the Company’s letterhead unless they are duly authorized by the Board of Directors of the Company. I wish to retaliate that signing of letters on the Company’s letterhead binds the Company and therefore only authorized signatories of the Company duly authorized by the Board have the authority to sign letters on Company letterhead.
Accordingly, any authorized use or singing of letters on Company’s letterhead is a breach of Company policy and may lead to termination of your employment and prosecution in a court of law for forgery.
I wish to request that all head of departments of the Company to remind all the employees including our CSAs at the stations of this notice in their departmental meetings to ensure compliance.
Thank you very much.
Kind regards
Kelvin Gathara
Legal & Human Resources Manager
Lexo Energy Kenya Limited,
Tel:+2540208000496
M:+254727098181
Laiboni Centre, 5th Floor, Lenana Road,
P.O Box 22428, Nairobi Kenya,
www.lexoenergy.com
63. In the circumstances, I find that the Respondent did not prove the charges against the Claimant. I further find that the facts as set out in the evidence before the court do not disclose culpable negligence or breach of company policy on the part of the Claimant. The Respondent has therefore not discharged its burden under sections 43 of the Employment Act.
Whether due process was followed in terminating the Claimant’s employment
64. The Employment Act requires that termination of an employee’s employment be carried out in accordance with fair procedure. This is couched in mandatory terms. Section 41 of the Employment Act provides as follows: -
“Subject to section 42(1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation.”
65. The Claimant averred that the disciplinary process taken against him was procedurally unfair. He testified that no investigation committee was constituted and that the Respondent relied on fabricated disciplinary minutes which did not accurately capture his responses. Further, he averred that he was denied the right to appeal against the decision to terminate his employment.
66. The Respondent, on the other hand, maintained that it complied with the law. It produced a notice to show cause dated 14th November 2024, the Claimant's response to
[...truncated]